diff --git a/src/services/suggestionDiagnostics.ts b/src/services/suggestionDiagnostics.ts
index 0c8ec58798c94..f2961e19345d5 100644
--- a/src/services/suggestionDiagnostics.ts
+++ b/src/services/suggestionDiagnostics.ts
@@ -5,7 +5,9 @@ namespace ts {
         const checker = program.getDiagnosticsProducingTypeChecker();
         const diags: Diagnostic[] = [];
 
-        if (sourceFile.commonJsModuleIndicator && (programContainsEs6Modules(program) || compilerOptionsIndicateEs6Modules(program.getCompilerOptions()))) {
+        if (sourceFile.commonJsModuleIndicator &&
+            (programContainsEs6Modules(program) || compilerOptionsIndicateEs6Modules(program.getCompilerOptions())) &&
+            containsTopLevelCommonjs(sourceFile)) {
             diags.push(createDiagnosticForNode(getErrorNodeFromCommonJsIndicator(sourceFile.commonJsModuleIndicator), Diagnostics.File_is_a_CommonJS_module_it_may_be_converted_to_an_ES6_module));
         }
 
@@ -61,6 +63,29 @@ namespace ts {
         return diags.concat(checker.getSuggestionDiagnostics(sourceFile));
     }
 
+    // convertToEs6Module only works on top-level, so don't trigger it if commonjs code only appears in nested scopes.
+    function containsTopLevelCommonjs(sourceFile: SourceFile): boolean {
+        return sourceFile.statements.some(statement => {
+            switch (statement.kind) {
+                case SyntaxKind.VariableStatement:
+                    return (statement as VariableStatement).declarationList.declarations.some(decl =>
+                        isRequireCall(propertyAccessLeftHandSide(decl.initializer), /*checkArgumentIsStringLiteralLike*/ true));
+                case SyntaxKind.ExpressionStatement: {
+                    const { expression } = statement as ExpressionStatement;
+                    if (!isBinaryExpression(expression)) return isRequireCall(expression, /*checkArgumentIsStringLiteralLike*/ true);
+                    const kind = getSpecialPropertyAssignmentKind(expression);
+                    return kind === SpecialPropertyAssignmentKind.ExportsProperty || kind === SpecialPropertyAssignmentKind.ModuleExports;
+                }
+                default:
+                    return false;
+            }
+        });
+    }
+
+    function propertyAccessLeftHandSide(node: Expression): Expression {
+        return isPropertyAccessExpression(node) ? propertyAccessLeftHandSide(node.expression) : node;
+    }
+
     function importNameForConvertToDefaultImport(node: AnyValidImportOrReExport): Identifier | undefined {
         switch (node.kind) {
             case SyntaxKind.ImportDeclaration:
diff --git a/tests/cases/fourslash/refactorConvertToEs6Module_notAtTopLevel.ts b/tests/cases/fourslash/refactorConvertToEs6Module_notAtTopLevel.ts
new file mode 100644
index 0000000000000..8de358138841a
--- /dev/null
+++ b/tests/cases/fourslash/refactorConvertToEs6Module_notAtTopLevel.ts
@@ -0,0 +1,12 @@
+/// <reference path='fourslash.ts' />
+
+// @allowJs: true
+// @target: esnext
+
+// @Filename: /a.js
+////(function() {
+////    module.exports = 0;
+////})();
+
+verify.getSuggestionDiagnostics([]);
+